Oil is crashing, and gas prices at the pump keep sliding lower and lower. As of early January 2015, a barrel of Brent crude (the global standard) is selling for less than $50, that’s half of what a barrel cost just six months ago. What does all of this mean? You wouldn’t likely think that a significant drop in oil prices could actually be a good thing for the environment and a bad thing for Big Oil and dirty frackers, yet it may well be.

It’s long been presumed that expensive oil makes alternative fuels much more viable. As this line of reasoning goes, cheaper oil will ensure that more of it will be pumped out of the ground and consumed. Gas guzzlers will replace smaller, more efficient vehicles, and more people will fly because plane fares will reflect lower fuel prices. Seems logical enough. That’s if, of course, you aren’t looking at Big Oil’s profit margins. Since 2008, oil production in the United States has increased 80%—from 5 billion barrels a day to over 9 million and the oil barons would very much like to keep it that way. Most of this increase comes as a result of North Dakota’s nearly overnight oil fracking frenzy. But now prices are freefalling, and profits aren’t what they used to be. The real question is: how long will these circumstances last? One thing is for sure, the longer the prices decline, the more impact they will have on the entire industry.

Let’s start with the fracking boom (oil, not natural gas) in North Dakota’s lucrative Bakken region. In May 2012, North Dakota leap-frogged Alaska to became the No. 2 oil-producing state in the country, trailing only Texas. More than $2 billion a month is spent in the state to frack oil out of the Bakken Shale Formation. As of June 2014, North Dakota was producing 1 million barrels of oil per day. This, while oil prices were well over $100 a barrel. To put it bluntly, it’s been a mad rush to frack every last bit of North Dakota’s oil. The environment be damned, it’s all about the money. But here’s the caveat and it’s a big one: at below $80 a barrel, nearly all of the major fracking operators in the Bakken start losing cash. The longer oil sits at around $50 a barrel, where it’s at today, the less oil will be fracked out of the frigid North Dakota tundra.

Investment bank Evercore Partners recently noted if this downward trend continues, companies in Asia, Europe and North America will be forced to dramatically cut capital spending. Evercore estimates that exploration and production in North America could be cut by as much as 25-30 percent and globally by 10-15 percent this year alone. If true, this means a serious recession will smack the oil producers in the very near future. If investments are indeed scaled back, it will mean that hard to reach oil reserves, those that cost a lot of money to access, will most likely remain in the ground. The signs are already showing up. ExxonMobile, Royal Dutch Shell and other major extraction outfits have recently announced lay offs and cuts in investment spending. In a nutshell, lower oil prices mean less oil production in the U.S.— not the other way around.

What’s the cause of this drop in prices? Some are taking conspiratorial jabs at the OPEC “cartel”, while others are laying blame at the feet of Vladimir Putin, but in reality the reason is much more benign: oil prices are simply reacting to the market and dropping to the average cost of global production, largely because oil prices have been overly inflated for the past two decades. Global commodity futures, not just oil, dropped throughout 2014, and strategic investors are now scaling back. In short, the world’s economy is slowing. This means, expensive oil-producing operations, like those in North Dakota, won’t remain profitable if the price of oil stays low.

For example, it costs far more to produce a barrel of oil from fracking in North Dakota (around $70-$80 per barrel) than it does to pump out a barrel of crude in Saudi Arabia ($4-$5 a barrel). The Saudis, one OPEC partner, certainly are not upset that prices are dipping even though they aren’t solely responsible (Venezuela, another member of OPEC, is taking a big hit as prices drop). The Saudis are now waiting for investors to turn their backs on expensive Arctic drilling in Russia, tar sands in Canada, and yes, oil fracking in the United States.